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Chris DeMuth Jr. is the founder of Rangeley Capital LLC. Rangeley is an investment firm that focuses on event driven, value-oriented investment opportunities. Rangeley Capital and his value investing forum, Sifting the World (StW), search the world for misplaced bets. Rangeley exploits them for... More
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  • How Does T-Mobile Look Since The MetroPCS Deal? 12 comments
    Dec 12, 2013 11:19 AM | about stocks: TMUS, T, DISH

    It is looking good and brings to mind several appealing options.

    (click to enlarge)

    My view was that the deal created economic value for shareholders and resulted in a combined company that was significantly more competitive in the marketplace. Since then, the stock has returned over 50%. Today, it is reasonably likely that TMUS will receive a bid from a strategic acquirer within the next year. Logical buyers would include AT&T (NYSE:T) or DISH Network (NASDAQ:DISH). DISH appears to have lost a bidding war for LightSquared out of bankruptcy, which keeps it in the hunt for more spectrum. What would TMUS be worth to either buyer? Closer to $50 than to today's $25 price. Meanwhile, TMUS could continue to gobble up spectrum. One reasonable possibility would be for T-Mobile (NASDAQ:TMUS) to acquire Globalstar (NASDAQ:GSAT) for around $2.25 per share in cash.

    Disclosure: I am long TMUS.

    Additional disclosure: Chris DeMuth Jr is a portfolio manager at Rangeley Capital, a partnership that invests with a margin of safety by buying securities at deep discounts to their intrinsic value and unlocking that value through corporate events. In order to maximize total returns for our partners, we reserve the right to make investment decisions regarding any security without further notification except where such notification is required by law.

    Stocks: TMUS, T, DISH
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  • Chris DeMuth Jr.
    , contributor
    Comments (11787) | Send Message
    Author’s reply » My wife helps me edit these posts.


    I asked her if she had any questions regarding this one, such as "is my husband a little bit of an a** for including that picture?".


    She edited out "a little bit of"...
    12 Dec 2013, 02:42 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11787) | Send Message
    Author’s reply » WSJ: Sprint Preparing a Bid for TMUS
    Sprint Corp. is working toward a possible bid for rival T-Mobile US Inc., people familiar with the matter said, setting the stage for a giant telecom merger that if permitted by regulators would leave the U.S. wireless market dominated by three big companies.
    Sprint is studying regulatory concerns and could launch a bid in the first half of next year, the people said. A deal could be worth more than $20 billion, depending on the size of any stake in T-Mobile that Sprint tries to buy.
    A merger of the third and fourth largest U.S. carriers would create a sizable competitor to industry leaders Verizon Wireless and AT&T Inc. But it would likely face tough opposition from antitrust authorities, who worry consumers could suffer without a fourth national competitor to keep a check on prices.
    Sprint hasn't yet decided whether to move ahead with a bid. Going forward despite regulators' concerns would be highly risky. Any pursuit of a bid by Sprint could be aimed at testing antitrust officials' reaction to a deal, and a bad reaction could put an end to the effort.
    It has only been two years since the Justice Department shot down AT&T's $39 billion deal to buy T-Mobile. The smaller carrier is wary of wasting more time on an ultimately fruitless merger deal, people familiar with its thinking said.
    Driving the current effort is SoftBank Chief Executive Masayoshi Son, an aggressive acquirer who bought control of Sprint earlier this year and has made no secret of his desire to grow in the U.S. via further deals. SoftBank currently owns more than 80% of Sprint.
    Deutsche Telekom AG owns about 67% of T-Mobile US and is looking to possibly exit the U.S. market, the people said. T-Mobile, which became publicly listed this spring after merging with smaller rival MetroPCS Communications Inc., has a market capitalization of just over $20 billion.
    Together, Sprint and T-Mobile would have nearly 53 million so-called postpaid subscribers—the industry's most creditworthy and lucrative customers. That would still leave the combined company a distant third to Verizon Wireless, which has about 95 million postpaid subscribers, and AT&T, with about 72 million.
    Executives from Sprint and T-Mobile have argued publicly that the government should allow a combination of the two companies, as it would give them the scale to make the network investments and spectrum purchases needed to compete against Verizon Wireless and AT&T.
    13 Dec 2013, 04:18 PM Reply Like
  • ralph111
    , contributor
    Comments (277) | Send Message
    is it possible deutche telecom may want to exit the us market & concentrate in its own market areas at home with EU standards becoming more politicized they may want to concentrate on a market area with a population base larger than the us plus meet all requirements Brussels deveopes?
    15 Dec 2013, 11:42 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11787) | Send Message
    Author’s reply » From many conversations surrounding the PCS deal, my sense is that DT desperately wants to exit the US market.
    15 Dec 2013, 11:55 AM Reply Like
  • madcatinahat
    , contributor
    Comment (1) | Send Message
    Why in hell would they want to exit the us market? They have here more customers than in germany and offer a wider range of options, this market in the us opens them a lot of opportunities. What is their reason to give it up?
    As far as I know, DT could easily buy sprint themself, so why? They have gained more post payed customers in the last year than other carriers combined. Tmobile is also changing the market here, verizon and at&t copycat tmobile.
    It just doesnt add up.
    Plus, if a crappy company like sprint, which so many complain about buys tmobile, and Son gains control. It means saying goodbue to all the innovation, new data plans, prepaid offers etc.
    I personally wont have a phone, I simply refuse tobe bind to a 2 yr contract that is just sucking from my pocket. And I am NOT alone!
    17 Dec 2013, 09:30 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11787) | Send Message
    Author’s reply » Dish eyes 2014 bid for T-Mobile:
    19 Dec 2013, 07:49 AM Reply Like
  • bazooooka
    , contributor
    Comments (3688) | Send Message


    Do you expect GSAT to be acquired first (or as a condition) before Sprint would close on TMobile?
    19 Dec 2013, 11:45 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11787) | Send Message
    Author’s reply » Good question, but I don't know the answer or have any useful thoughts.
    20 Dec 2013, 06:38 AM Reply Like
  • toddro
    , contributor
    Comments (227) | Send Message
    I'm not sure if this would have any bearing on TMUS moving forward with GSAT, but TMUS has swapped some spectrums with VZ.

    19 Dec 2013, 08:03 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11787) | Send Message
    Author’s reply » The 10 Best Business Decisions of 2013:
    22 Dec 2013, 06:40 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11787) | Send Message
    Author’s reply » It looks as if we'll get a $S-$TMUS deal with a nominal deal price between $38 and $40. $DISH will help fix the regulatory problems.
    19 Jan 2014, 11:57 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11787) | Send Message
    Author’s reply » (TMUS) hit a new 52-week high.
    28 May 2014, 10:29 AM Reply Like
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